IN THE continuing saga of government's right hand not knowing what its left hand is doing, the Agriculture Department has come under fire for planning to donate 500 metric tons of surplus U.S.-grown peanuts to Haiti, via the U.N. World Food Program. The intent is noble: to feed protein-rich peanut snacks to some 140,000 Haitian schoolchildren who might otherwise suffer malnutrition. However, the U.S. aid represents subsidized foreign competition for Haiti's peanut growers, who are struggling to supply the local market, with support from U.S. charities, such as the Clinton Foundation, as well as — you guessed it — the U.S. Agency for International Development. There's a petition on the White House website calling on the USDA to call off the peanut aid to protect Haiti's farmers.
It's a classic dilemma: give Haiti peanuts and its children eat for a year; teach Haiti to grow peanuts, and the impoverished nation might feed itself long-term. The USDA points out that the amount it plans to supply Haiti represents only 1.4 percent of annual production, and that local farmers, beset by a recent drought and other issues, lack the wherewithal to meet the school lunch program's needs in the short run anyway. Nevertheless, Haitians have bitter memories of the way U.S. rice imports displaced their once-flourishing local farms in the 1980s, and they fear a repeat.
One thing is clear: the irrationality of U.S. farm subsidies, which skew the U.S. government’s options to begin with. The heavily lobbied but, to laypersons, incomprehensible provisions of the 2014 farm bill incentivize growers in several Southern states to increase land devoted to peanuts rather than other crops, even when peanut prices dip. The result has been production of a huge unmarketable surplus, which the government is committed to take off farmers’ hands at a hefty loss to taxpayers. The USDA accumulated 113,000 metric tons of peanuts in 2015, of which it still retains 16,000 metric tons. Needless to say, it costs taxpayers plenty to warehouse that many goobers; the more the USDA can offload to places such as Haiti, the happier Congress will be.
Subsidies to peanut farmers could total between $960 million and $1.9 billion through 2018, the last year of the farm bill — depending on whether you believe estimates from the Congressional Budget Office or from the USDA. Either number represents a huge increase in peanut-subsidy spending over levels reached in the previous farm bill.
And for what? Peanuts are a useful food item but hardly a strategic material worthy of special government supply management, even if, contrary to experience, the government managed it optimally. U.S. farmers who grow peanuts are sophisticated business owners perfectly capable of coping with a free market. Coddled and protected at taxpayer expense — i.e., at the expense of people who earn less than a typical peanut planter — they set a poor example for Haiti’s struggling farmers. In fact, the latter could probably teach them a thing or two about the supposedly American values of hard work and self-sufficiency.
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